What are payroll records?

Published Wednesday 30 September 2026

Table of contents

• What are payroll records?
• What should payroll records include?
• Malaysian laws that govern payroll records
• How long to keep payroll records in Malaysia
• Monthly and annual payroll deadlines
• Why you need to keep payroll records
• Where to store payroll records
• Best practices for managing payroll records
• Keep payroll records organised with Xero
• FAQs on payroll records
• Related terms
• Learn more about payroll records

Key takeaways

• Payroll records in Malaysia show each employee’s personal details, employment terms, wages and statutory deductions for every pay period
• Retention periods depend on the law: six years for employment and retirement fund records, and seven years for social security and tax records
• Retirement fund, social security and monthly tax deduction payments are all due by the 15th of the month after you pay wages
• Digital storage with controlled access makes inspections easier and helps you meet your data protection duties

What are payroll records?

Payroll records are the documents that show who you employ, what you pay them and what you deduct from their wages each pay period. In Malaysia, they include your employee register, wage records, payslips, and records of statutory contributions and tax.

Think of them as the paper trail behind every pay run. Say the Inland Revenue Board of Malaysia (LHDN) asks how you worked out an employee’s March wages. Your records should answer without guesswork.

If you’re setting up pay runs for the first time, start with these online payroll basics before you build your filing system.

What should payroll records include?

Malaysian law spells out what your records must contain, and the requirements overlap. Under regulation 5 of the Employment Regulations 1957, your register needs each employee’s personal details, employment terms, and wages and allowances per wage period.

You must bring the pay details up to date no later than three days after each wage period ends. The Employees Provident Fund (EPF) goes further, listing 14 items in its employer record-keeping requirements.

Those 14 EPF items cover:

• each employee’s full name, gender and date of birth
• identity card or passport number, plus citizenship
• EPF membership number
• home address and job title
• employment start date and pay term
• wage amount and any other payments
• the employee’s EPF deduction and your employer share

You also need to give each employee a wage statement showing both EPF shares, under section 42(1) of the EPF Act 1991. A free payslip template helps you set out the basics the same way every month.

Malaysian laws that govern payroll records

Several laws shape what you record and how long you keep it. Each has its own regulator, so one pay run can create records for more than one agency.

The laws that apply to most employers are:

• the Employment Act 1955, which requires you to keep a register for each employee under section 61
• the Employees Provident Fund Act 1991, which covers wage records, payslips and retirement contributions
• the Employees’ Social Security Act 1969, which covers contributions to the Social Security Organisation (SOCSO), also known as PERKESO
• the Employment Insurance System (EIS) Act 2017, which covers EIS contributions that PERKESO also collects
• the Income Tax Act 1967, which sets tax record duties, including monthly tax deduction (PCB) from wages

EPF rates also shape what your records show. Employees contribute 11%, and you contribute 13% on wages of RM5,000 and below or 12% above RM5,000, according to EPF’s contribution rates. For non-Malaysian employees, a 2% employee and 2% employer rate applies from October 2025 wages.

The Employment Act 1955 applies in Peninsular Malaysia and Labuan. Sabah and Sarawak have their own labour ordinances, while EPF, SOCSO and income tax rules apply nationwide.

How long to keep payroll records in Malaysia

You need to keep payroll records for six or seven years, depending on the law. Each period starts from a different point, so track them separately.

Here’s how long each law asks you to keep records:

• Keep your Employment Act register for at least six years after each entry is recorded
• Keep EPF wage records for at least six years from the date of the last entry, under section 42(2)
• Keep SOCSO employee records for seven years from the last entry date
• Keep tax records for seven years from the end of the relevant year of assessment

PERKESO’s social security protection guide says SOCSO records must hold each employee’s name, identity card number, occupation, contribution details, monthly wages and allowances. The seven-year tax period comes from section 82A of the Income Tax Act 1967.

Here’s how that works in practice. Records for year of assessment 2026 should stay on file until at least the end of 2033.

Monthly and annual payroll deadlines

Your payroll records also prove you’ve paid and filed on time. The monthly deadlines line up on the same day, which makes them easy to diarise.

EPF, SOCSO and EIS contributions, and PCB, are all due on or before the 15th of the month after the wage month. For example, if you pay January wages, EPF expects that contribution by 15 February.

The SOCSO payment schedule follows the same 15th-of-the-month rule. For PCB, LHDN’s employer duties set the same monthly deadline, plus two annual ones.

Each year, you must give every employee a Form EA by the last day of February. You then submit Form E, together with CP8D, to LHDN by 31 March.

Why you need to keep payroll records

Well-kept payroll records protect you during inspections and give you the figures you need to plan. Here’s how they help your business day to day.

Legal compliance

Accurate records show you’ve met your duties under each law, including paying at least the RM1,700 monthly minimum wage. That rate has applied to all employers since 1 August 2025, according to this Minimum Wages Order 2024 summary.

Complete records also protect you from penalties. Failing to keep or preserve your section 61 register is an offence under section 97 of the Employment Act 1955.

Under the EPF Act, skipping an employee’s wage statement can bring up to six months’ jail, a fine of up to RM2,000, or both. Deducting an employee’s EPF share without paying it can bring up to six years’ jail, a fine of up to RM20,000, or both. EPF’s compliance and enforcement rules set out both penalties.

Tax readiness

Your payroll records feed your PCB calculations, Form EA and Form E. When they’re complete, year-end filing comes down to pulling reports you already have.

If LHDN reviews your returns, you can show how you worked out each figure.

Business planning

Wages are often one of your largest regular costs. When each pay run flows into your transaction records, you can compare labour costs with sales and plan new hires with real numbers.

Resolving pay disputes

Say an employee questions their allowances or final pay. Your register and payslips show what you agreed and what you paid, so you can settle the question with facts.

Supporting your employees

Your team relies on payslips and Form EA to file their own tax returns and check their EPF savings. With accurate records, you can answer their questions or reissue documents quickly.

Where to store payroll records

You can keep payroll records on paper or digitally, as long as they stay complete and ready for inspection. Many small businesses use a mix of both.

Digital storage

Cloud storage makes records searchable and backs them up automatically. You can find a payslip from three years ago in seconds, with no boxes to dig through.

Before you move your Employment Act register to a digital-only system, check the approval step in the security section below.

Paper records

Paper files work well when you store them in a locked, dry place and label them by year. Scan them too, so a fire or flood can’t erase years of history.

Security and data protection

Payroll records hold identity card numbers, addresses and salaries, so they need tight protection. To keep your Employment Act register in another manner, section 61(3) lets you apply in writing for the Director General’s approval.

The Personal Data Protection Act 2010 (PDPA) was amended in 2024. Since 1 June 2025, data controllers must appoint a data protection officer (DPO) and report data breaches, as this overview of the PDPA changes explains.

Limit payroll access to the people who run pay, and use strong passwords with two-factor authentication.

Best practices for managing payroll records

A few regular habits keep your records accurate and ready for inspection. Build these into each pay run:

• Update your register within three days after each wage period ends
• Record each employee’s citizenship correctly, since EPF rates differ for non-Malaysians
• Match EPF, SOCSO, EIS and PCB payments against payslips before the 15th
• Store contracts and pay change letters in each employee’s file
• Set a disposal date for each record type based on the law that applies
• Review your process once a year with a certified Xero advisor

Keep payroll records organised with Xero

Payroll records are easier to manage when your pay data and accounts sit in one place. Xero connects with payroll apps from the Xero App Store, such as HReasily, Talenox and Deel, so pay run details can flow into your books.

See how payroll apps work with Xero, then sign up today and get one month free.

FAQs on payroll records

Here are answers to common questions Malaysian employers ask about payroll records.

Do you need to keep records for employees who’ve left?

Yes. EPF and SOCSO retention periods run from the last entry, so a former employee’s final pay record starts a fresh six- or seven-year period.

Can you keep payroll records electronically in Malaysia?

Yes, though a digital-only Employment Act register needs the Director General’s approval first. Companies and Labuan companies must also submit Form E through e-Filing, and LHDN treats it as complete only once CP8D arrives on time.

Do foreign workers need EPF contributions?

Yes. Non-Malaysians who registered as EPF members from 1 August 1998 contribute 2%, matched by 2% from you, starting with the November 2025 contribution month.

What happens if you miss the 15th payment deadline?

PERKESO charges interest at 6% a year for each day SOCSO contributions stay unpaid. Your payroll records help you show exactly when each payment went through.

Do these rules apply in Sabah and Sarawak?

EPF, SOCSO, EIS and income tax record rules apply across Malaysia. The section 61 register comes from the Employment Act 1955, so employers in Sabah and Sarawak should check their state labour ordinance.

Related terms

• Payroll
• Payslip
• Audit
• General ledger
• Expense

Learn more about payroll records

• Guide to payroll outsourcing
• Guide to hiring employees
• Guide to the accounts payable process
• Guide to online accounting